by Mitch Kokai
Senior Political Analyst, John Locke Foundation
… [T]he problem with Sarah Bloom Raskin is not the nature of “her position on climate regulation” per se, but rather that Sarah Bloom Raskin thinks that it would be her job to have a “position on climate regulation.” Explaining his opposition today, Manchin explained that:
“The Federal Reserve Board is not an institution that should politicize its critical decisions. The time has come for the Federal Reserve Board to return to its defining principles and dual mandate of controlling inflation by ensuring stable prices and maximum employment. I will not support any future nominee that does not respect these critical priorities.”
The Federal Reserve is not a replacement for the United States Congress. It is an institution that was created by the United States Congress. And it was created to play an extremely narrow role within a system that is supposed to be dominated by . . . well, the United States Congress. Sarah Bloom Raskin has not indicated that she understands that, and, as a result, her nomination has rightly been deemed inappropriate. …
… [P]rogressives tend to say, “Well, yeah, climate change really is a risk.” But, even if it is, that does not set it within the purview of the Federal Reserve. There are many things that lead to “disorderly price adjustments in various asset classes; potential disruptions in proper functioning of financial markets; and rapid changes in policy, technology, and consumer preferences that markets have not anticipated” — up to and including war — but this does not mean that we should hand over any more power than we already have to the Federal Reserve. It is not the Fed’s job “to bring about the adoption of practices and policies that will allocate capital and align portfolios toward sustainable investments,” and that Raskin has so much as hinted otherwise should be enough to kill her nomination.